KENNEWICK, Wash.–Warning small credit unions could be “extinct” within a decade, the “Endangered Credit Union Defense” has been formed by the leader of one credit union here.
The Endangered Credit Union Defense (ECUD) organization is a 501(c)(4) Washington State nonprofit social welfare organization organized in part to not just defend smaller CUs, but also the smaller communities they serve, according to its backers.
The founder and president of ECUD is Doug Wadsworth, president of the $74-million Tri-CU Credit Union, which he said is the only small credit union left in Tri-Cities, Wash. market.
Wadsworth, who he has been with the credit union 2008, said it operates out of a single office in Kennewick, with 14 employees.
Why are They Struggling?
“The number of small credit unions decreases every year, and some estimate they will be extinct within a decade,” Wadsworth said in a released statement. “Why are they struggling? In addition to increasing competitive pressure from large expanding institutions, it’s due to an increasing regulatory compliance burden, and regulations designed for large complex institutions, which are irrelevant (but very costly) for small institutions.
“When small credit unions are gone, the negative impact on their small communities will be significant,” Wadsworth continued. “Small credit unions fill a niche for many who struggle financially, whether it is for superior personal support in managing their money, or for loans, when they simply can’t qualify at larger institutions.”
‘Fierce Advocacy’
ECUD said it will “fiercely” advocate to protect small credit unions from extinction by:
- Pushing for Regulatory Relief. “We advocate for exemption from overly burdensome, costly and pointless regulations that were developed for large complex institutions,” the organization said. “If there isn’t a clear benefit to the safety and soundness of the small credit union, it shouldn’t be required.”
- Promoting Member-Centric Giving: “We encourage small credit unions to embrace their not-for- profit cooperative roots and prioritize giving profits back to members,” ECUD stated. “This reinforces our core purpose, justifies our tax-exempt status and better differentiates us from large impersonal institutions.”
Gathering Endorsements
The Endangered Credit Union Defense said it is currently gathering endorsements from a “growing number” of small credit unions located in Washington State, both state and federally chartered. It has defined “small” as assets under $500 million.
When it comes to its advocacy priorities, ECUD said it has a “fairly long list” of regulations that burden small credit unions that don’t offer “any value to the membership, let alone any significant impact on safety or soundness.”
“These regulations were often designed for large complex institutions, so in many cases we are simply seeking exemptions,” the organization said.
The Specifics
Among its specific regulatory relief priorities are:
- CECL
- HMDA
- BSA
- NMLS, Qualified Mortgage Price Controls
- Unreasonable regulatory pressure
- Over-allocation of examiners
- Overly frequent regulatory examinations
- Excessive regulatory application of disciplinary measures (which it called “Gotcha Enforcement”)
- Multiple small regulations that “became obsolete decades ago, but still waste small credit union resources, such as the bi-annual account verification and reconciliation”
- The complex new bond insurance renewal procedures
- The annual home value assessments
- And more.
For those interesting in more information, Wadworth can be reached at [email protected].
One Response
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